Many British banks are forming partnerships with large US cloud providers, a move deemed ‘bizarre’ by a leading UK cloud CEO.
- Gordon McArthur argues that these alliances may not benefit British banks, as the US firms could potentially become rivals.
- The financial success of UK-based cloud firm Beeks contrasts with concerns over these international partnerships.
- There is ongoing scrutiny by the UK Competition and Markets Authority into potential anti-competitive practices by major cloud providers.
- The outcome of the investigation remains uncertain, with some expressing doubts about its effectiveness.
The CEO of Beeks, a prominent UK cloud service provider, has expressed bewilderment over British banks’ tendency to collaborate with large US cloud companies. Gordon McArthur, who leads the AIM-listed firm, finds it peculiar that banks are entrusting their data and infrastructure to entities known for their aggressive commercial strategies and aspirations within the financial services sector. He stated, ‘I find it quite bizarre that the banks are willing to give their data and infrastructure to three of the most aggressive commercial organisations in the world [that have] all said they want their own financial services businesses.’ This admission points to a potential conflict of interest, with these banks possibly aiding future competition by handing over core data.
Beeks has reported robust financial health, with its sales increasing by 27% to £28.5 million for the year ending in June. The firm clinched several new cloud contracts, including a significant deal with one of the UK’s largest banks. This growth is further evidenced by a 68% rise in pre-tax profits, reaching £3.9 million. Beeks also noted a promising expansion in their sales pipeline with ongoing negotiations with major international exchanges.
Amidst this financial landscape, the UK’s Competition and Markets Authority (CMA) has extended its inquiry into the practices of global cloud giants. The initial deadline for the comprehensive analysis of the UK cloud market has been moved from April 2025 to August 2025. This delay is to allow the CMA ample time to investigate thoroughly and address complex market behaviours potentially harming competition.
In a display of corporate rivalry, Google has criticised Microsoft over its licensing policies, suggesting they significantly limit customer choice in the UK. The accusations entail that Microsoft’s licensing restricts competition by imposing technical and contractual limitations that could disproportionately favour Microsoft. However, Microsoft maintains that the market is dynamic, and the CMA’s conclusions do not reflect the real-world scenario.
McArthur remains sceptical about the CMA’s investigation leading to substantial changes, citing the formidable financial influence of large corporations. ‘These big guys have got so much lobbying cash…so I do think it’ll be a bit toothless to be honest,’ he commented, reflecting a commonly held apprehension about the efficacy of regulatory investigations into such entrenched market players.
The evolving dynamics between UK banks and US cloud providers, alongside scrutiny from the CMA, underscore significant concerns in the cloud market.
